Document Content

DECISION No

DECISION No. 89/2003/QD-TTg OF MAY 8, 2003 ON SOME MEASURES TO HANDLE DEBTS INCURRED DUE TO BORROWING DEVELOPMENT INVESTMENT CAPITAL FOR BUILDING OR MODIFYING OFF-SHORE FISHING AND FISHING SERVICE SHIPS UNDER THE PRIME MINISTER’S DECISION No. 393/TTg OF JUNE 9, 1997, DECISION No. 159/1998/QD-TTg OF SEPTEMBER 3, 1998 AND DECISION No. 64/2000/QD-TTg OF JUNE 7, 2000

THE PRIME MINISTER

Pursuant to the December 25, 2001 Law on Organization of the Government;

At the proposal of the Minister of Aquatic Resources (Official Dispatch No. 3066/BC-BTS of November 18, 2002),

DECIDES:

Article 1.- To adjust the lending interest rates and lending terms for organizations and individuals that borrow capital from the State’s preferential credit capital sources for modifying and/or building ships and boats as well as procuring fishing gears, prescribed in Article 1 of Decision No. 64/2000/QD-TTg of June 7, 2000 amending the lending interest rates and the lending as well as credit debt repayment terms as stated in the Regulation on management and use of credit capital for projects on building and/or modifying off-shore fishing- and fishing service ships, issued together with the Prime Minister’s Decision No. 159/1998/QD-TTg of September 3, 1998 as follows:

1. The interest rate of 5.4%/year shall apply to debit balances till December 31, 2002.

2. The capital-borrowing term shall not exceed 12 years as from the date of first-time capital withdrawal.

Article 2.- To assign the People’s Committees of provinces and centrally-run cities, ministries and branches (hereinafter called the People’s Committees of the provinces, ministries and branches for short) which are managing the investors that borrow capital from the State’s preferential credit capital sources for ship building to assume the prime responsibility and coordinate with the Development Assistance Fund, Vietnam State Bank and the Aquatic Resources Ministry in directing the debt handling along the following directions:

1. To classify investors in order to work out specific handling measures:

1.1. The investors that are conducting production and/or business with efficiency and able to repay their debts under the credit contracts may re-buy the ships they are using (if they so wish) and shall have to pay the remaining principals to the lending organizations in lump-sum; if they wish to borrow more capital, the lending organizations shall consider and provide them with new loans according to current regulations on provision of commercial loans.

1.2. The investors that are able but reluctant to repay their debts shall not be entitled to debt extension or re-scheduling. If, within 6 months as from the inspection date, they still fail to fully repay their debts under the credit contracts, the local administrations and concerned agencies shall coordinate with the lending organizations in compiling minutes and recovering the ships for auction in order to retrieve debts.

1.3. For investors that use borrowed capital for wrong purposes: To inspect, compile minutes and inventory the assets formed from this capital source for confiscation; to transfer these debt balances into commercial loans and change the inventoried assets into assets mortgaged for debt retrieval to the State.

1.4. For investors that have suffered from losses and met with difficulties in their daily-life activities or not yet used the ships for production or have used the ships for production not at the top gear:

a) For investors that are professionally qualified and capable of organizing production and business activities, but cannot repay their debts on time due to objective reasons or capital shortage, they shall be considered for debt extension or re-scheduling, or re-setting of debt-repayment terms which, however, must not exceed the debt-repayment duration as prescribed at Point 2, Article 1 of this Decision; or if they have efficient production and business plans, the lending organizations shall consider and continue providing them with new loans under current regulations on provision of commercial loans so as to ensure the retrieval of both principals and interests. After applying the above-stated handling measures, if the investors still fail to repay their debts, it shall be allowed to change investors.

b) The investors that have met with force majeure risks: ship wreck, ship missing due to natural disasters, the capture and unreturn of their ships by foreign countries…, thus being unable to repay their debts, the investors shall compile dossiers (with the opinions of the provincial-level People’s Committees or their managing ministries) and send them to the lending organizations for the latter to sum up and propose general handling measures to the Prime Minister.

c) The investors that have not yet used the ships for production or have used the ships not at the top gear and failed to work out plans to efficiently deal with the situation shall be considered on a case-by-case basis for change of investors and transfer of loans.

2. On the change of investors and handling of debts:

For investors that have suffered from production and business losses and met with difficulties in their daily-life activities, the People’s Committees of the provinces, ministries and branches shall direct functional agencies in the localities to coordinate with the lending organizations in organizing the change of investors and handling of debts on the following principles:

2.1. The presidents of the provincial-level People’s Committees (for projects managed by localities) and the ministers (for projects managed by ministries) shall set up Councils to determine the ships’ prices according to market prices at the time of price determination, and at the same time, organize the public auctions of the ships without any discrimination or restriction on buyers, but must comply with the Regulation on property auction, issued together with the Government’s Decree No. 86/CP of December 19, 1996; the buyers shall not have to pay tax for the transfer of the ownership right over the property.

2.2. In cases where the auction winners immediately pay in lump-sum a money amount equal to the value of the ships upon the auction, they shall not have to abide by conditions on ship purchase prescribed by the lending organizations.

If the buyers are unable to immediately pay in lump-sum a money amount equal to the value of the ships upon the auction, they may acknowledge such amount as debts owed to the lending organizations with the following conditions: having to immediately pay at least 50% of the value of the ships upon the auction, fully meeting all lending conditions prescribed by the lending organizations and having certification of local administrations.

2.3. The whole proceeds from the auction must be repaid immediately to the lending organizations after subtracting all expenses for the auction as prescribed. The difference between the value of the ships after the auction and the payable debts (both principal and interest) shall be handled as follows:

a) If the proceeds from the auction of the ships are larger than the payable debts, after repaying debts and subtracting all expenses for the ship auction, the remainder shall be returned to the former investors.

b) If the proceeds from the auction of the ships are smaller than the payable debts, the former investors shall have to acknowledge the negative difference between the ship value after the auction and the payable debts as their debts owed to the lending organizations (including expenses for the ship auction) and must repay these debts within 2 years after the ship auction is completed. In cases where the former investors are unable to repay these debts, the lending organizations shall coordinate with local administrations in considering them on a case-by-case basis so as to auction other properties in order to retrieve debts (both principal and interest) according to law provisions. In cases where they do not have any more property or the proceeds from the auction of their properties are not enough to repay these debts, the investors shall have to compile and send dossiers thereof (with the opinions of the provincial-level Committees or the managing ministries) to the lending organizations for the latter to sum up and submit them to competent agencies for consideration and handling.

Article 3.- Implementation organization

1. Vietnam State Bank and Development Assistance Fund shall direct the lending organizations to specify the lending term for each loan to each specific subject and provide detailed guidance on the change of ship owners.

2. The lending organizations shall sum up, verify and propose measures to handle irretrievable debts to the Finance Ministry and Vietnam State Bank for consideration and submission to the Prime Minister.

3. The Ministry of Aquatic Resources shall enhance the work of fishery promotion among, and training of fishermen in the domain of aquatic resources exploitation and aquaculture; guide localities in building up models whereby production is linked to contractual consumption of products; and provide guidance on fishing fields and resources to fishermen, in order to conduct production with efficiency.

4. The People’s Committees of the provinces shall have to coordinate with, and support the lending organization and concerned agencies in, handling debts: to direct the classification of capital-borrowing subjects so as to work out proper handling measures, ensuring the equality and rationality; to enhance the dissemination and education among fishermen in order to raise their sense of fulfilling their commitments in the capital-borrowing contracts; and strictly handle cases of shirking the obligations of repaying debts to the State.

Article 4.- This Decision takes effect 15 days after its publication in the Official Gazette.

Article 5.- The ministers of Finance; Planning and Investment; and Aquatic Resources, the Governor of Vietnam State Bank; the general director of Development Assistance Fund and the presidents of the provincial/municipal People’s Committees shall have to implement this Decision.

For the Prime Minister

Deputy Prime Minister
NGUYEN TAN DUNG